Pakistan Stock Exchange (PSX) on Thursday came under slightly downward pressure, sparked by institutional profit-taking in overbought stocks amid the ongoing corporate earnings season.

In the morning, trading commenced on a positive note, reflecting the previous day’s growth momentum, and the KSE-100 index touched its intra-day high of 72,593.25 points around midday.

Investor participation in market proceedings remained lacklustre ahead of the State Bank of Pakistan’s (SBP) monetary policy announcement early next week.

The index faced further pressure due to fears of likely withdrawal of subsidies on the recommendation of the International Monetary Fund (IMF). Weak global crude oil prices and rupee depreciation also fuelled the bearish momentum.

Investors took profits in cement and steel sectors, which erased earlier gains and pulled the index down to the intra-day low of 71,700.53. Resultantly, the bourse closed with a thin decline.

“Stocks closed under pressure on institutional profit-taking in selected, overbought shares and adjustments in the earnings season,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Lower global crude oil prices, a weaker rupee, the government’s structural reforms under a new IMF programme for potential withdrawal of subsidies in energy, fertiliser and gas sectors, and expectations of status quo in the SBP policy announcement next week played the role of catalysts in negative close at the PSX.”

At close, the benchmark KSE-100 index recorded a slight decrease of 80.49 points, or 0.11%, and settled at 71,971.40.

Topline Securities, in its report, said Thursday’s “trading session at Pakistan’s stock market ended with a slight decrease of 0.11%. During the day, the index reached the intra-day high and low of 72,953 and 71,701 points, respectively”.

Oil and gas exploration, auto, banking, cement and fertiliser sectors mainly contributed to the index’s decline, with Millat Tractors, Pakistan Oilfields, Lucky Cement, Faysal Bank and Engro Corporation collectively losing 206 points.

Conversely, United Bank, Oil and Gas Development Company, and Engro Fertilisers made positive contributions, adding a total of 167 points, Topline added.

Arif Habib Limited (AHL), in its report, highlighted that K-Electric surged as the National Electric Power Regulatory Authority (Nepra) approved the company’s investment plan and loss assessment for transmission and distribution business for seven years starting FY24.

Millat Tractors (-5.35%) declared 9MFY24 earnings per share (EPS) of Rs40.98, up 269% year-on-year (YoY), but it came in below expectations following a strong run in the last couple of weeks into the December highs.

Engro Corporation (-0.62%) announced 1QCY24 EPS of Rs10.66, up 30% YoY, which also came in below expectations, the AHL report added.

Overall trading volumes increased to 798.5 million shares against Wednesday’s tally of 599.4 million. The value of shares traded during the day was Rs27.5 billion.

Shares of 389 companies were traded. Of these, 173 stocks closed higher, 191 dropped and 25 remained unchanged.

K-Electric was the volume leader with trading in 119.6 million shares, gaining Rs0.5 to close at Rs4.64. It was followed by WorldCall Telecom with 79.96 million shares, gaining Rs0.05 to close at Rs1.39 and Unity Foods with 44.3 million shares, gaining Rs0.6 to close at Rs24.91. Foreign investors were net buyers of shares worth Rs113.4 million, according to the NCCPL.

Published in The Express Tribune, April 26th, 2024.

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